03/11/2010 08:00 AM House STATE AFFAIRS

         HB 251-VEHICLE LIENS/TOWING/STORAGE/TRANSPORT                                                                      
                                                                                                                                
8:08:03 AM                                                                                                                    
                                                                                                                                
CHAIR LYNN announced  that the first order of  business was HOUSE                                                               
BILL  NO.  251,  "An  Act  relating to  liens  on  vehicles;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
8:08:58 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JAY  RAMRAS, Alaska State Legislature,  as sponsor                                                               
of HB 251, stated that towing  companies are often called upon by                                                               
emergency services  to tow a  vehicle, but don't always  get paid                                                               
for their services.  He  explained that sometimes "powers greater                                                               
than they  are" have the  ability to get  the vehicle out  of the                                                               
impound yard.   The proposed  legislation would "put  them before                                                               
the lien holder."                                                                                                               
                                                                                                                                
8:10:11 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO described a  hypothetical situation in which                                                               
he has sold his car to  someone, with the understanding that that                                                               
person will make a certain  monthly payments for a certain amount                                                               
of time.   He said, "I fully  expect that if there  ... [are] any                                                               
extra liens  on it, they would  be secondary to me,  because that                                                               
was the original  lien."  He said if the  buyer still owes $2,000                                                               
and the vehicle is towed to a lot  at a cost of $100 and sits for                                                               
two  months  at  a  rate  of $100  a  day,  "I  have  essentially                                                               
extinguished all of  my legitimate ownership of  the vehicle ...,                                                               
and instead it went to a  towing company."  He concluded, "That's                                                               
my fear of  what will happen to  an ordinary guy who  is first in                                                               
line, and  then somebody, by this  law, can say, 'I  can displace                                                               
you.'"                                                                                                                          
                                                                                                                                
8:11:29 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   RAMRAS   stated   his   personal   belief   that                                                               
overwhelmingly, vehicles  are owned by banks  and often predatory                                                               
lenders, and rarely  does a transaction occur  that includes time                                                               
payments  between  two  individuals  where a  tow  charge  "comes                                                               
between the person to whom the funds are owed."                                                                                 
                                                                                                                                
8:13:03 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO said he understands,  but wanted to see what                                                               
the response would be.  He  said this is a matter of proportions.                                                               
He stated,  "So, if  this is  an incidental amount  of loss  to a                                                               
corporation,  but a  major  loss to  an  ordinary business  owner                                                               
who's  just got  his  neck above  water and  that's  all, then  I                                                               
understand."                                                                                                                    
                                                                                                                                
8:13:53 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  said he  is prepared  to move  the bill                                                               
out of committee, with the  understanding that the next committee                                                               
of  referral will  address issues  such as  being careful  of the                                                               
rights of  financial institutions.   He said part of  the problem                                                               
is in another  section of Title 28, which gives  a towing company                                                               
only a possessory  lien, and that requires the  towing company to                                                               
keep possession of  [the vehicle] to protect itself.   He said it                                                               
may   be   necessary  to   rework   that   part  of   Title   28.                                                               
Representative  Gruenberg  said   otherwise  what  Representative                                                               
Gatto said  is correct  and it  is "the little  guy who  owns the                                                               
car" who will pay the consequences.                                                                                             
                                                                                                                                
8:15:19 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  mentioned other recourses, such  as small                                                               
claims  and   garnishing  the  permanent   fund  dividend.     He                                                               
concluded, "So, I don't know how big an issue this really is."                                                                  
                                                                                                                                
8:16:04 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  said in  his part of  town there  are a                                                               
lot of  poor people.  Sometimes  a person gets pulled  over for a                                                               
burned out  tail light and  the police  find out the  person does                                                               
not have insurance.  The vehicle  then goes to the towing lot and                                                               
sits there  because the owner does  not have the money  to get it                                                               
out.  He said this has been a concern of his for a long time.                                                                   
                                                                                                                                
8:16:23 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG moved to report  HB 251 out of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes.  There being no objection,  HB 251 was reported out of the                                                               
House State Affairs Standing Committee.